Accounting News and Notes

Atlanta CPA on How Best to Utilize an Atlanta Payroll Service 

For the new business owner getting your new business started; it is essential to get it going in the right direction; utilizing an Atlanta Payroll Service is your best bet to get your Atlanta business started off on the right foot. A payroll service has the advantage, whether you have one employee or thousands, of quickly and efficiently handling all of your payroll needs. Payroll services will handle all of your payroll issues including: 

-Payroll Check Preparation.

-Payments to federal, state and local authorities.

-Payroll reports to federal, state and local authorities.

-Printed or Electronic Checks.

-On-line or next day delivery.

-On-line, verbal for fax reporting.

-Active customer support.

-Management ready payroll reports.

-New Hire Reporting Assistance & Compliance.

-Garnishment Assistance.

-Assistance with Payroll Reports.

-Handling of any IRS or state tax notices received.

-Automatic drafting of payroll taxes and fees.

-Automatic crediting of payroll proceeds to an employee’s personal account. 

Having served as a CPA in Atlanta for now 30 years, I remain committed now more than ever that a CPA firm, who has your best interests at heart, will perform payroll services. Though a CPA firm is eminently qualified to handle and perform payroll tasks and all of there reporting issues, a CPA firm by definition will either charge you CPA rates for predominantly clerical services or they will package or bundle the services putting their name on a payroll company’s work adding there mark up for doing so. Desiring first to serve is a motto we all should aspire to. If where you live is at all similar to the Atlanta marketplace, there are many fine payroll companies, many of them national companies, who are more than capable of providing excellent service at a fair price. 

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and to learn about his ministry visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304 proudly serving Duluth, GA, Gwinnett County and Beyond. 

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!” What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31 Why are these verses here? Learn how His CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html  

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Business Acquisitions/Sales, Forensic Accounting, Business Valuations and Bookkeeping.

Atlanta CPA Advises Georgia Taxpayers on Addressing Offers in Compromise and Back Taxes with the IRS 

Many will shy away from certain deductions because of a fear of being audited. Although clearly no one desires to be audited as both the administrative burden and potential economic burden of an audit are more than enough to be considered as well as the emotional stress. However, I believe all clients should never not take a deduction they are legally entitled to as otherwise they are overpaying their taxes and paying more than their fair share. However, in serving the truth, we can trust that the truth, regardless of an audit environment or not, will indeed set us free. However if you find yourself facing an IRS audit or needing IRS Representation retaining a CPA if your best first step to ensure that you only pay what you legally owe. Below is a sample letter that might be used if a client inadvertently failed to include and represent open payroll taxes, which were failed to be included and communicated in an Offer in Compromise to the IRS.  

Internal Revenue Service

Atlanta GA  

Enclosures: My letter dated 01-20-10 (copy enclosed) 

Please cease all collection efforts on the above taxpayers as am working to submit an Offer in Compromise to address all of the open monies due on their account.I am writing you in a good faith attempt to come to terms over the above taxpayers’ present predicament with the IRS  I am willing/eager to supply you with any information that you might need to close your file. I plan to submit and Offer in Compromise on the above referenced taxpayers ASAP after I can get the payroll taxes assessed to them personally as the responsible party. Their original Offer in Compromise inadvertently did not include their monies so that Offer is being rescinded. ASAP after the payroll taxes/Civil Penalty is assessed the above taxpayer personally as the responsible party an Offer in Compromise will be submitted including these monies. 

In the interim please be advised that the taxpayer now works another employer and that they are accordingly paying her ongoing income taxes there via payroll withholding. 

The above taxpayers have advised me that they have filed all of their presently due tax returns. I believe that this shows they want to continue as taxpaying citizens and to begin actively paying taxes as they are owed. Please note the taxpayers  recently paid the IRS an estimated tax payment of $10,000 to bring their current tax payments current.  

It is my goal to help in their efforts to return to compliance. Since I have assumed the role as their financial advisor (they had no advisor previously), I have consulted with them, and in good faith I would like to make and Offer in Compromise for the taxpayers to pay as much of the balance of the tax liability as they possibly can.   

Please note that I have advised the taxpayers that after the acceptance of their Offer that they must stay in compliance by keeping all of their filings and payments current for five years.  They have further been advised that in the event they do no maintain the above that the previously accepted offer would be voided and the previously abated monies would be reinstated and collection efforts resumed.  

Please cease all collection efforts while this Offer is being re-submitted.  I appreciate your attention to this matter and please do not hesitate to contact me should you have any questions. 

Sincerely, John C. Dillard, CPA, PC, Partner in Charge 

How Audits are Selected
Learning about how audits are selected is the first step to discovering how to overcome the emotional and financial distress that normally occurs as part of the audit process. Lifting this veil will help keep you on an even keel in learning how to deal with the IRS audit. Visit http://www.hiscpa.com/irs-selection.html

When the IRS Notice Arrives
Rather than beginning the process in fear, discover how you can better prepare yourself so that you are not surprised at the audit process and its ultimate results. By seeing through to the other side you can best ready yourself to close your audit with no adjustments and no additional monies due. See http://www.hiscpa.com/irs-audit.html

Solving IRS Tax Issues
Don’t fight the IRS but work with them to resolve your tax problems. Discover a myriad of legal ways the IRS is eager and willing to work with you to resolve any unpaid debts, penalties, and interest. To learn more http://www.hiscpa.com/working-with-the-irs.htm l

Paying Your Taxes – Withholding and Extensions
Paying your taxes made easy. This section will enable you to quickly grasp the general guidelines of tax law requiring that you pay taxes as you earn money. As well, extensions and their uses and limitations are disclosed and discovered. Visit http://www.hiscpa.com/paying-taxes.html

How to Avoid an IRS Audit
Discover simple steps that you can do to help prevent an IRS audit. Though the tax code is at times very difficult to understand and comply, these basic simple steps will help you avoid an IRS audit. See http://www.hiscpa.com/avoiding-audits.html

Solving IRS Tax Problems: Submitting an Offer in Compromise
When all else fails and if you qualify, the IRS and Georgia both have a program which will enable you to work to solve the severest tax problems. Visit http://www.hiscpa.com/offer-in-compromise.html

Utilizing IRS Installment Plans to Pay Your Past Due Taxes
The IRS has long been in the business of helping taxpayers get back into the system to ensure that taxpayers are able to pay their taxes over time. For those who do not qualify for an Offer in Compromise or to pay the taxes and interest in full, while seeking penalty abatement, an Installment Plan is a prudent and wise choice and alternative to get your past taxes due paid and current. See http://www.hiscpa.com/installment-plans.html  

John Dillard is an Christian Speaker/Author and an Atlanta CPA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!    

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas

Atlanta CPA Advises on How to Determine What Your Withholding Should be for S Corporation Owners 

To preclude the responsibility for an S Corporation owner to also have to pay estimated tax payments to both the IRS & Georgia, it is prudent to work closely with your CPA to adjust/increase your withholdings accordingly.

A Georgia LLC, LLP, partnership or sole proprietorship, you are subject to the 15.3% Self Employment/FICA tax on all of your net earnings. The S corporation, on the other hand, pays you a deductible salary (which is subject to FICA), and then the profits flow through your personal return via a Schedule K-1. This K-1 income allows for permanent deferral of the FICA tax. The Georgia S corporation allows small business owners to legally save taxes as long as they pay a fair and reasonable salary to themselves. To learn more about how different entities are taxed visit http://www.hiscpa.com/article6.html

There is no income tax paid by as S Corporation when the annual tax return is filed to the IRS. However, as a part of the corporate return which is prepared, a Form 1120S, there is an attached schedule which shows each owners respective ownership percentage and via a Form K-1 for which each shareholder should reflect on their personal return. K-1 profits, losses, and shareholder distributions are all required by tax law to be issued based upon the each shareholders ownership percentage. In order for losses to be deductible a shareholder has to have a positive tax basis, which is a component of past profits, losses, and loans to and from the business. If a shareholder has no basis to cover losses reported on a K-1, they are by tax law considered to be “suspended losses” and can be rolled forward to future years when the shareholder has positive basis, which can be created by future years profits or the shareholder loaning money to the business.

An owner should report the K-1 profit, which is based upon their share of the business and not the amount of their shareholder distributions. This is a common misnomer about S Corporations and often leads to confusion for the new business owner. To that end it is best to remember that you pay taxes on the profits when you make them and not when you take them. For example generally speaking if your business nets $100,000 and you are the sole owner, you will pay taxes on $100,0000 whether you take zero dollar of shareholder distributions, a $100,000 or any number in between. Thus if you were to have a $100,000 profit in any given year and take no distributions then you would be able, absent any other issues, to take shareholder distributions in subsequent years with no additional tax responsibility as these monies would have already been taxed.

Converting Your LLC to an S Corporation for Tax Purposes

An LLC is legally allowed to convert over to an S Corporation for tax purposes which can legally allows the savings of thousands annually. Although being an LLC offers some flexibility (no Board of Directors/ease of formation), being an LLC will typically result in many businesses paying an higher tax bill on its earned income.

If an LLC converts to an S Corporation for tax purposes, it remains an LLC for all other issues thus maintaining the advantages initially desired. When a business converts over to an S Corporation all active employee/owners are required to take a fair and reasonable salary. The best test of a reasonable salary is what an owner would have to pay someone else to perform their position and it is a function of their position, responsibilities, and the business’s profit. If an LLC converts over to an S Corporation for tax purposes its federal and state income taxes will remain essentially the same. However, an LLC pays FICA & Medicaid taxes on all of its net earnings/earned income whereas an S Corporation will be obligated solely on its salary/W-2 wages.

 John Dillard is an Christian Speaker/Author and an Atlanta CPA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!  

 Contact HIS CPA PC (A Christian Atlanta CPA Firm) today.

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Gwinnett CPA Helps New Georgia Business Get Started on the Right Financial Footing: Incorporating in Georgia

Recently I had the below inquiry from our website. Desiring first to serve we focus on Serving the Atlanta Business Community even before they become clients:

We are a new business just outside Atlanta and are seeking a solid Business CPA to help us with our business, tax, and licensing issues. We are just getting our business started and want to ensure that we get it off on the right foot. We would appreciate your guidance in this area and look forward to hearing from you soon and all about of your payroll tax and withholding issues. 

Below is our response designed to assist and serve others in our community and beyond:

Thanks for visiting www.HisCPA.com I would welcome as you begin your new business and to ensure that you are aware of and correctly apply all business tax, and licensing issues. As payroll is perhaps the largest most difficult of administrative issues for business owners to address, I suggest all business owners utilize the services of a payroll company to assist and to write a monthly paycheck. Might I consider you call Ms. Staci Graham at 404 242 2645. 

For the other issues please feel free to give me a call and I will be happy to assist. John Dillard CPA, 770 814 9304.

Getting your Newly Formed Business Incorporated in Georgia started off on the right foot is essential to prudence and good business planning when starting a new business venture.

Getting Your New Georgia Business Started
Understanding many of the basics of the start of the incorporation process will do much to ensure that you are well-versed and able to make wise and informed decisions. As these issues will affect your business operations and finances during the lifetime of your business they are essential to getting started well. Go to http://www.hiscpa.com/incorporating-guide.html

Determining Where Incorporate Your New Geogia Business
The decision of where to incorporate your business is a critical component of getting your business started. Learn what you need to know to make a well-informed decision. See http://www.hiscpa.com/incorporating.html

 Gerogia Corporation Forms and Registrations Checklist
Whether you are just incorporating or have been in business for years. This summary will enable you to quickly locate the forms and guidance you need to ensure your business maintains tax compliance. Visit http://www.hiscpa.com/checklist.htm

Incorporating Your Issues for Your New Georgia Business Leadership

Knowing who will lead your business, their morals, beliefs and work ethic are essential to success in your new business venture. Determining who should be at the helm and who should follow will do much to avoid needless delays and time lost in aimless decision making. http://www.hiscpa.com/business-leadership.html

Incorporating the Details for Georgia Business Owners
Learning the basics of incorporation will do much to ensure that you do not make a costly mistake. Discovering the details of what all is involved in your new Georgia business will much to ensure you avoid costly mistakes and blunders. http://www.hiscpa.com/incorporating-details.html

 John Dillard is an Christian Speaker/Author and Certified Public Accountant in Duluth, GA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!  

Contact HIS CPA PC (A Christian CPA Firm) today.

Atlanta CPA on Tax Answers You Can Use: Not More Data That Needs Interpreting 

Having served as a Metro Atlanta CPA for twenty eight plus years, I still see clients/taxpayers seeking specific guidance that is specifically tailored to them and their needs rather than a “pat/standard program” geared towards the needs of the CPA. Recently I received an inquiry from a client seeking guidance and direction, of which is detailed below: 

Please contact me with so I can send you detailed explanation of our needs, which includes 2008 Corporate Tax Returns for a very small business, making sure we were up to date on 2008 & 2009 Federal & State monthly/quarterly requirements, 2008 K1, & 2008 Personal Return. Since there was very little business, it’s not very much work, just printing correct forms, etc…  Please advise next steps and/or your email.  Thanks. 

Though many taxpayers come prepared with their own answer for me to supply them, it is necessary for the CPA to be a quick study and to address their individual needs both accurately and succinctly. To this end I prepared the below response:

 To help all of our clients I have on our website at http://www.hiscpa.com/newclient.html  a detailed checklist for you to use to pull your information together to prepare your year-end returns. Rather than supplying you with a thirty page “tax organizer” that will leave you exhausted, I have tailored one that reflects all the important nuances of tax return preparation in just a few pages. Though your tax data may appear simple, and indeed if your business is small, we work with you to make sure that you both pay your lowest legal possible tax and by adding efficiencies to the process to keep your CPA fee as low as possible.  

We work with many taxpayers to help them get current on their taxes and to address their tax needs by your keep it simple style, our attention to detail, and out technical competency. Although we promise ten day turnaround on all of our work, your actual results will typically be just a fraction of that period.  

Please note to help clients keep their administrative issues to a minimum, we recommend all of our clients utilize the service of a payroll service, for which I would be happy to refer. Payroll and its attending administrative issues, payments, withholdings, forms and varying due dates are a “mine field” that you can avoid by delegating that responsibility to a payroll service, who can do it cheaper than either yourself or a CPA.  

Please note when your corporate income tax returns are completed that a K-1 is issued to all shareholders reflecting their prorated portion of the company’s earnings that are to be reflected on an individual shareholders personal return. Thus it is imperative that we complete your corporate return first.  

We are committed to living out the “Golden Rule” of treating our clients as our friends and giving the best service possible. Our goal of Serving Him as We Serve You, will help you receive the very best advice we can provide. I would welcome meeting to get started and I have time openings later this week and please note: our initial thirty minute consultation is free.

Contact HIS CPA PC (A Christian CPA Firm) today.

To learn more about addressing IRS Tax Issues and Back Tax Returns visit http://www.hiscpa.com/working-with-the-irs.html  

John Dillard is an Christian Speaker/Author and Certified Public Accountant in Duluth, GA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!    

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Duluth CPA on Trust Fund Monies: Working with the IRS to Address Civil Penalties

If your company has employees or collects sales tax, the dollars withheld from payroll and sales taxes collected are technically withheld “in trust.” Accordingly they have legal exposure to both the company for payment, as well as those personally responsible parties who knew about and controlled such payments. The  responsible party is generally defined as those who were most/responsible for payments that would well extend to check signers, accounts payable, officers, and financial staff. This assessment is for one personally who collected trust monies which they unduly did not remit to the appropriate taxing/legal authority. As these monies are withheld in trust, they do not belong to the company/business. The IRS and individual states take a very dim and stern view of all those who unduly use their money. The 100% penalty may be assessed to the responsible parties making them personally responsible for any collected and unpaid trust fund monies. Having served as a CPA in Metro Atlanta for decades getting behind in the payment of your company’s payroll taxes is the fastest way to financial ruin and is essentially the illegal conversion of IRS/State Trust Monies to unauthorized use.

When a  business is not able to pay its staff payroll taxes/remit collected sales taxes as due, it is a clear warning side that the business model is upside down. Many times it would indicate that the margins of a business are not adequate to support the business’ present staffing levels and overhead, it could also be an indicator that the business is not properly leveraged/financed. In either case it is cause for drastic action that will most likely result in an immediate change in staffing levels and consideration to immediately close the business. A business cannot sell itself out of a problem, these options are most always the best course.

To learn more about addressing IRS Tax Issues and Back Tax Returns visit http://www.hiscpa.com/working-with-the-irs.html

Contact HIS CPA PC (A Christian CPA Firm) today.

Award Winning Atlanta CPA

John Dillard is an Christian Speaker/Author and Certified Public Accountant. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!    

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Payroll tax returns and their attendant issues are the bane of many business owners both big and small.  Tax law at federal, state and local levels often leaves an entrepreneur feeling both dazed and confused.  There is no greater area of need for tax simplification than in the area of payroll tax issues.  Payroll tax returns and payments are due to the varying regulatory agencies at differing times, unique and special forms and often what appears to be conflicting reporting styles and forms.  Unfortunately, this is just the tip of the confusion to which you will help find clarification below.

Withholdings
Federal and state withholding (depending upon and varying by state)
Employers are required to submit to their employees a withholding form/certificate, on which the employee documents and confirms their filing status and their number of exemptions.  Employers then are required to use this information to determine the statutorily withholding based upon withholding tables required by the IRS and varying states.  The withholding certificate for the IRS and Georgia are a W-4 and G-4 form respectively.  It is the employees responsibility to complete these forms and then for the employer to withhold these amounts as directed.  All withholding taxes are taken out of an employees check and then remitted over to the respective taking authority.  In this capacity, an employer is required to act in a fiduciary capacity in the withholding and payment of these monies.
Unemployment Insurance/Department of Labor
Both the IRS and the state of Georgia assess against employers an unemployment tax.  This tax is paid exclusively by the company, and there are no required withholding or additional taxes being paid by the employee.  Both the IRS and Georgia limit the amount of taxes a company will pay on any given employee to a maximum salary amount per year.  These monies/taxes are due on the first wages paid a particular employee in any given calendar year.  While the IRS assessment rate/percentage is statutory the rate to Georgia fluctuates based upon an individual companies claims experience.

FICA
FICA insurance is taken out of an employee’s paycheck and then is matched by the employer.  Like withholdings, FICA taxes taken out of an employees paycheck are treated as fiduciary monies and are required to be submitted over to the IRS with rigidly defined dates, dorms and reporting format and method of payment.  FICA insurance withholdings are calculated based on a prescribed statutory rate and the maximum amount of salary this is based upon is annually indexed for inflation.  These monies are given over to the Social Security Administration for monthly periodic payments to those who qualify when they retire or become disabled.

Medicaid
Medicaid Insurance also is an amount an employee is required to be withheld out of their salary and is in turn matched by their employer.  Medicaid taxes, FICA and federal withholding are all reported and paid concurrently.  However, unlike FICA taxes, which are only assessed up to a specified annual amount, Medicaid taxes are assessed on all of one’s earned income (W-2 wages) regardless of the amount.  Medicaid monies are then used to pay for medical expenses for those who qualify.

Electronic Filing EFTPS
EFTPS is the procedure and process that the IRS specifies employers to use to report and pay all payroll taxes.  EFTPS is where employers report and pay IRS monies electronically and via magnetic media.

Because of the many varying reporting formats, forms, methods and electronic reporting requirements, it is most advisable that all employers (regardless of size) utilize and retain a payroll service to handle all of its payroll needs.  Payroll companies will not only process the actual paychecks themselves, but also prepare the required payroll reports and make the needed tax payments.  This process is relatively seamless as most all payroll companies debit your account for the required payroll taxes at the time of payroll check processing.  Payroll companies also have the ability to make electronic payments directly to an employee’s account thereby saving time and money.
Contact HIS CPA PC (A Christian CPA Firm) today.
John Dillard is an Christian Speaker/Author and Certified Public Accountant. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!  

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.
Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Risk Management 101

Being aware of where and when to incorporate and where your business/company should pay its taxes and have payroll withholding on its employees, will provide you with needed insight to avoid unnecessary pitfalls, fees, and legal issues that befall many. There is a lot of hype out there about where to incorporate that may well lead you to discover that the steps you made to protect your business while in good faith, have caused complexities that hurt rather than help your business. In general there are several criteria to evaluate when considering where to originally incorporate/domicile your business as well as where to have your business do state withholding on its employees. All the criteria should be looked at in aggregation to consider including:

Base Business Operations – Where your business actually earns money and produces income is a critical component to consider in determining where your business should legally domicile and register. For example if your headquarters is in Georgia, you would incorporate in GA absent any other substantive issues. However if your business transacts business operations in other states you would want to consider registering your corporation as a foreign corporation in that other state. This designation does not register you as a foreign corporation to the U.S. but to the state where you are transacting business and have substantive business operations.

Employer/Employees – For all states where you have employees you will want to be sure to register and incorporate in those states whether you have an office in that state or even if you solely have employees who work out of their homes in those states.  Generally speaking if you had an employee who was in a state for a very brief amount of time, then it would be cost disadvantageous to comply with all of the applicable state laws. As such, it is prudent to work with a CPA/your attorney to determine a wise and judicious Risk Management Policy.

Office/Physical Location – For all locations that your business has a physical location and on-going physical presence, you will want to register your corporation as doing business in that state. This would also likely ensure/require you to do state withholding in those states where you have employees and to withhold state income taxes and pay appropriate state and local income taxes.

Having a sound risk management plan is an integral part of the incorporation/registration process and is tantamount in making wise and informed decisions.

Contact HIS CPA PC (A Christian CPA Firm) today.

John Dillard is an Christian Speaker/Author and Certified Public Accountant. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!    

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Ministers’ Compensation and Housing Allowance

A frequently misunderstood portion of tax law centers around the a minister’s income and his parsonage/housing allowance. Generally speaking a minister’s parsonage or rental allowance is excluded from his gross income when calculating his taxable income for income tax purposes. However, the parsonage allowance is not deductible when determining a pastors self-employment taxes that are due and payable.

If you are a Minister and you receive part of your salary (for ministerial services) an amount officially designated (before payment is made) monies officially/specifically designated as a rental/housing allowance, you can exclude from your gross income the amount that is used to provide/rent a home. This exclusion is limited to the lesser of the fair market value of the home of the amount specifically designated in advance as a rental/housing allowance or the actual amount used to provide a home and cannot exceed what is reasonable pay for your services.

If housing is provided by your congregation as pay for your ministerial services, the exclusion cannot be more than what would be reasonable pay for your services. This essentially would dictate that your parsonage allowance cannot exceed the amount of your wages as detailed on line 7 of your Form 1040.

If a minister owns their own home and receives a housing allowance as part of their pay, the exclusion cannot be more than the smaller of:
-The actual cost to provide a home.
-The amount officially designated (in advance) as a rental or housing allowance.
-The fair market rental value of the home.
-Amount of what would be deemed reasonable pay for ministerial services.
-Allowance cannot exceed the amount of wages on line 7 of Form 1040/W-2 wages.

Although a minister can exclude the parsonage/housing allowance for income tax purposes, it is not a deduction when determining self-employment taxes.

The above example would reflect what the IRS would refer to as a common law employee. Even if a minister were to be able to qualify as a common law/statutory employee and to pay their own FICA/Medicaid taxes or Self-Employment taxes, it is this author’s opinion that it would be better for the minister if the church treated them as an employee and withheld all applicable FICA/Medicaid Taxes on their Gross Wages and any parsonage allowance.

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/  (An Atlanta CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and to learn about his ministry visit http://www.john-dillard.com/

Atlanta CPA Saves Metro Atlanta Client $120,000 in Payroll Tax Penalties

One of the tax cases we personally handled involved an Atlanta Based client who had not paid almost three years of payroll tax returns, specifically IRS Forms 940 and Form 941.During this time the company collected but did not remit to the IRS the Federal Withholding Taxes, FICA, and Medicaid taxes. Also the company did not pay the matching taxes due as well as the Federal Unemployment taxes due and payable. For payroll taxes due and payable at the corporate level the IRS and Georgia both take a very dim view of business owners who will take and withhold taxes from their employees and then not remit these monies over to the taxing authorities.

Failure to pay to the Internal Revenue Service or to Georgia withheld payroll taxes is essentially the violation of the trust and responsibility to fulfill their fiduciary responsibility. To these end both the IRS and Georgia can assess a 100% Liability to all responsible business officers, owners and check signors who were responsible for and failed to remit to taxing authorities monies withheld from an employee’s paycheck. This is commonly referred to as the 100% Penalty. Having been an Atlanta CPA for decades, this is one area where I have personally witnessed several companies fall into “a financial abyss.”

However there is hope. There are three primary options when you get behind in your taxes to work with the IRS to resolve them including getting on an Installment Plan, Submitting an Offer in Compromise or paying the tax and interest in full while asking for abatement of the penalties. In the above referred to case the IRS had assessed approximately $210,000 of taxes, $12,000 of interest and $120,000  of penalties. By working closely with our client they were able to source funds from other sources to pay the taxes and interest in full, while asking that the IRS abate the $120,000 of assessed penalties. Though the case took several more months of work and negotiation than anticipated and we had to involve the Atlanta Taxpayer Advocate Office/Service, we were ultimately successful in saving the client $120,000 of penalties. To read more about the IRS and how best to deal with “taxing issues” take a look at these articles:

Surviving an IRS Audit

How Audits are Selected
Learning about how audits are selected is the first step to discovering how to overcome the emotional and financial distress that normally occurs as part of the audit process. Lifting this veil will help keep you on an even keel in learning how to deal with the IRS audit.  http://www.hiscpa.com/irs-selection.html

When the IRS Notice Arrives
Rather than beginning the process in fear, discover how you can better prepare yourself so that you are not surprised at the audit process and its ultimate results. By seeing through to the other side you can best ready yourself to close your audit with no adjustments and no additional monies due.  http://www.hiscpa.com/irs-audit.html

Working with the IRS

Solving IRS Tax Issues
Don’t fight the IRS but work with them to resolve your tax problems. Discover a myriad of legal ways the IRS is eager and willing to work with you to resolve any unpaid debts, penalties, and interest.  http://www.hiscpa.com/working-with-the-irs.html

Paying Your Taxes – Withholding and Extensions
Paying your taxes made easy. This section will enable you to quickly grasp the general guidelines of tax law requiring that you pay taxes as you earn money. As well, extensions and their uses and limitations are disclosed and discovered.  http://www.hiscpa.com/paying-taxes.html

How to Avoid an IRS Audit
Discover simple steps that you can do to help prevent an IRS audit. Though the tax code is at times very difficult to understand and comply, these basic simple steps will help you avoid an IRS audit.   http://www.hiscpa.com/avoiding-audits.html

Solving IRS Tax Problems: Submitting an Offer in Compromise
When all else fails and if you qualify, the IRS and Georgia both have a program which will enable you to work to solve the severest tax problems.  http://www.hiscpa.com/offer-in-compromise.html

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and to learn about his ministry visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304 proudly serving Duluth, GA, Gwinnett County and Beyond.

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!” What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31 Why are these verses here? Learn how His CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html

Serving Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Gwinnett County, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, and Beyond

Helping Clients with Corporate & Personal Income Taxes, Incorporation Advice, Tax Planning, Virtual CFO, Financing, Business Plans, Back Taxes, Offer in Compromise, Tax Advocacy, Business Acquisitions & Sales, Business Plans, and IRS Representation.